Last week, AARP doubled-down on its insistence that Social Security and Medicare benefits should be off the table in negotiations to stabilize the nation’s debt. It did so in a letter to members of the deficit reduction “super committee” and in response to a Concord Coalition statement criticizing AARP’s new ad campaign, which warns that 50 million seniors will be heard from on election day if Congress even thinks about touching their benefits or asking them to pay more.
AARP’s further explanations are not encouraging. It continues to insist that Social Security poses little, if any, budgetary challenge because of an ample trust fund surplus and that cutting unspecified “waste” in Medicare can avoid hard choices on benefits and cost-sharing. AARP’s response to Concord’s statement:
The natural outcome of AARP’s position is continued, if not intensified, political gridlock. The politics of deficit reduction are hard enough without interest groups building walls around favored items. Exemptions sow resentments, destroying the needed sense of shared sacrifice.
Should military veterans accept a cut in their benefits when Social Security can’t be touched? Should taxes on workers be raised or programs for children cut when seniors keep their 75 percent subsidy for physician services and pharmaceuticals? This political dilemma was recognized by two bipartisan fiscal commissions last year that recommended broad changes across all segments of the budget.
Moreover, ominously, AARP’s refusal to have its members bear any of the sacrifices needed to solve our fiscal problems pits generations against one another and risks the broad support Social Security and Medicare have enjoyed. Social insurance programs critically depend on everyone's approval and trust. They form an implied generational compact in which each generation's welfare depends directly upon the willingness of the next generation to participate. If the next generation grows disaffected, the survival of the system is thrown into question.
The issue is not whether Social Security and Medicare are good programs. They are. The issue is whether they are sustainable over the long term in their present form. They aren’t.
Social Security and Medicare already comprise 33 percent of the budget. In the years ahead, an aging population will greatly expand the number of beneficiaries for both programs, while rising health care costs will increase the cost per beneficiary for Medicare. Both factors will put heavy pressure on the budget. This conclusion is not one cooked up by The Concord Coalition. The CBO, the Government Accountability Office (GAO) and the programs’ own trustees under Democratic and Republican administrations have all warned of huge imbalances in the years ahead.
Neither program can pay promised benefits without a large and growing dose of general revenue from the Treasury. This puts them in competition with other spending priorities. AARP’s position, which seems to represent a new hard-line approach, is that there should be no competition at all…senior benefits must always win. This would inevitably mean deep cuts in all other federal spending, large tax increases, or unsustainable levels of borrowing. It is an untenable position.
To bring deficits and debt under control, policymakers will ultimately need to reduce projected spending to levels that can be supported with plausible levels of taxes and debt. Given their size and projected growth, any strategy for fiscal sustainability will require reform of Medicare and Social Security. This will require difficult choices regarding who should receive what level of benefits, and how those benefits should be delivered.
To be clear, AARP is not the only organization in Washington that has taken a hard line against changes affecting its interests. Anti-tax advocates, in particular, have made a point of insisting that there must be no net tax increase. That, however, is little comfort and simply underscores AARP’s lost opportunity for leadership. Unfortunately, the nation’s leading advocate for seniors is not ready to have an “adult conversation” about Social Security and Medicare.
Concord Coalition Criticizes AARP Ad Campaign As Irresponsible: http://concordcoalition.org/press-releases/2011/1017/concord-coalition-criticizes-aarp-ad-campaign-irresponsible
AARP Responds to Criticism of Campaign Advertising: http://www.aarp.org/about-aarp/press-center/info-10-2011/aarp-responds-to-criticism-of-campaign-advertising.html